With the popularity of apps like Revolut and Monzo, what is the future of money?
Recently I’ve been waxing lyrical to anyone who will listen about Revolut. No, not because I’m trying to get some in-app freebies by referring a friend, but because I’ve genuinely found it life-changing. Those shared taxi journeys that never get split between friends are paid off with a few quick taps, I can keep eagle-eyed tabs on my spending (not always a good thing) thanks to monthly analytics and I can exchange money into the local currency while on hols without the expensive fees and charges ruining my fun.
I realised recently that in the past two months I have used physical cash just once, and only then it was because the card machine was broken when paying for my morning brew and I had to dash to the nearest ATM to fund my habit. In such a short space of time, spending cold hard physical cash has become alien to me and truth be told, I now hate having it on me. What a nuisance to have loose change tumbling around in my pockets or fivers that I could easily lose down the back of the couch, when I have a secure, digital balance at my fingertips on my smartphone.
It’s true that most of us aren’t really using cash anymore, gleefully tapping away for rounds of shots on nights out or placing orders on Boohoo with saved card details and a few swift clicks. Gone are the days when we’d owe a pal for lunch and tell her “I’ll get you again next time”. Now, we open an app and send her the money on Monzo before we’ve even left the restaurant. But is a completely cash-free future truly on the horizon?
The stats are certainly pointing that way. In Ireland, contactless payments have risen by 500 percent year on year while debit transactions have doubled since 2014. Cash payments are predicted to become the minority in the next half a decade and experts reckon we’re on track to become completely cashless by 2030 but we’re still lagging far behind other countries.
Sweden, the market leader, is making moves to make cash obsolete and is on course to be the first cashless society by 2023. From then, cash will no longer be accepted on any purchase, with the economy going 100 percent digital. Currently, some 80 percent of all its transactions are conducted electronically, either via card or Swish, an app developed in collaboration with the country’s six main banks to make electronic payments easier. Swish has been widely embraced and used by everyone in Sweden and it’s now pretty difficult to find an establishment that accepts cash. Somewhat ironic when you remember that, ABBA, their most famous export sang ‘Money, Money, Money.’
In Ireland, businesses are slowly but surely embracing this cash-free mentality. Bear Market Coffee on Dublin’s George Street became the country’s first cash-free cafe earlier this year with the owners saying that by eliminating cash, and making tap their primary way to pay, they could offer “improved customer experience, service and efficiency” – and it’s a rare retailer these days that doesn’t offer its customers the ability to tap and go. Still, in the years to come even bank cards could become redundant with apps like Apple Pay and The Visa Token (a new security technology which replaces sensitive account information with a unique digital identifier called a token) set to become mainstream in the next couple of years.
A cashless society has obvious perks. There’ll be a fall off in certain types of crime that depend on illegal transactions such as the drug trade, which relies on money changing hands – I shan’t imagine many drug dealers will be keen to conduct their business using chip and pin! Likewise, financial crimes like tax evasion will become much harder to conceal and with no physical cash to steal there’d be fewer instances of theft.
There’s also the convenience factor, no more running to an ATM for your taxi fare or rummaging for the correct change for the bus – and it’s easier to track your spending too.
But there are drawbacks. Could it be awful for our spending habits? Sometimes I long for the days of bringing out a €50 note and knowing that has to do me for the night, instead of drunkenly blowing my budget buying rounds I’ve bought on card. Cash somehow seems more precious, more important to hang on to, than a intangible number on a screen. And throughout the years, many studies have suggested that we are in fact more inclined to spend big on plastic: one notable study found shoppers spend up to 100 percent more when using card over cash, and The Financial Times has identified “a worrying correlation” between countries with the highest proportion of electronic payments and those with the highest levels of personal debt.
There’s also the problem of what would happen if any of these digital systems failed. When Visa’s payment system crashed in June 2018 it created chaos, leaving millions of customers unable to pay for good and services, forcing them to rush to ATMs to withdraw cash in their droves.
A cash free world favours the young too. While younger generations may bank transfer and contactless tap to their heart’s contents and have some understanding of the complex world of cryptocurrencies, there are many older people who still use cash everyday and would be at a loss if money became a solely digital monopoly. I try to picture my mum who only recently learned how to use WhatsApp and my Dad, who still regularly writes cheques and took 24 months to fix our dodgy Wifi connection, getting on board with the technology that will enable this new cashless society. My mother panics when she mistypes a text: I have visions of her sending her life savings to Taiwan.
And what about the disenfranchised? I never have spare change to offer the homeless man that sits outside my local Spar because I simply never carry cash anymore and I wonder how, in a tech-based society, someone like him, with no email address, smartphone or bank card could get back on his feet. Surveys suggest that the poor are still largely dependent on cash, so what happens when we take their primary currency away?
Young or old, rich or poor, it looks like we’ll all need to prepare ourselves for a digi-based financial future, because the days of finding a stray fiver in your favourite pair of jeans or counting out your loose change to buy a coffee are steadily becoming a thing of the past.